Analysis
27 Jan 17

Diesel registrations hit record lows while RVs still stays stable

Whether diesel will make a hard or soft landing, is anybody's guess. But figures released by automotive and vehicle fleet data intelligence specialist Dataforce show the once-favoured fuel type has definitely started its descent. Comparing new vehicle registrations for 2015 and 2016 in selected European markets, diesel is going down. In fact: it has hit record lows. Better fasten your seat belts!

Dataforce examined the fuel types of new vehicles in Belgium, France, Germany, Italy, the Netherlands and Spain, for both the Private and True Fleet markets. That distinction reveals a truth across all markets: True Fleets favour diesel to a much greater extent than Private fleets, in some countries by a factor of two to one. However, the other, even more impressive constant factor is the downward trend of diesel, across all markets, in both the True Fleet and Private markets.

True Fleets Belgium
  2015 2016
Petrol 15.26% 20.58%
Diesel 81.50% 74.01%
Electric 0.66% 0.69%
Hybrid 2.58% 4.73%

 

True Fleets France
  2015 2016
Petrol 14.33% 17.17%
Diesel 80.66% 78.66%
Electric 0.81% 1.10%
Hybrid 4.20% 3.08%

 

Formidable decline
Take for instance France and Belgium, both countries that in the past, through various fiscal measures, have heavily favoured diesel. Those measures have been nullified, and even been reversed. The effect is noticeable, even in the short time span between 2015 and 2016 the decline is formidable: from 41.8% to 32.2% and from 44.4% to 37.8% in the Private market, in Belgium and France respectively.

In the True Fleet market, the initial share of diesel is much higher, and the decline less pronounced. Yet the direction is clear: from 81.5% to 74% in Belgium and from 80.6% to 78.6% in France. The drop is not a one-year thing: in France, diesel was at its lowest share since 2004, in both markets (the diesel share in the True Fleet market having dropped 13.3% since its 2008 high). In both Belgian market segments, the diesel share hadn't been this low since 2007.

Big winner
So who is the big winner? Clearly: petrol. In Belgium, its share rose from 56.7% to 65.7% in the Private market – the highest level since 2007 – and from 15.2% to 20.6% in True Fleet. The most remarkable change in Belgian True Fleet, however, was the progress of hybrids, increasing more than two full percentage points, from 2.5% to 4.7%.

Not so in France, where True Fleet hybrids actually declined, from 4.2% to 3.1%. Because 2016 was such a volume success, both petrol and EVs celebrated their best year ever – EVs even rising above the symbolic one-percent barrier to 1.1%. But even True Fleet diesels, despite declining two percentage points to 78.6%, had their best year in absolute volume.
 

True Fleets Germany
  2015 2016
Petrol 24.01% 26.67%
Diesel 74.49% 71.56%
Electric 0.52% 0.62%
Hybrid 0.98% 1.15%

 

True Fleets Italy
  2015 2016
Petrol 17.31% 18.07%
Diesel 80.14% 79.26%
Electric 0.32% 0.20%
Hybrid 2.23% 2.46%

 

Hybrid doubles
The important German market also saw declines in new diesel registrations, although not as dramatic as in Belgium or France. Diesel dropped about 3%, both in the Private (32.7% to 29.4%) and True Fleet market (74.5% to 71.6%). In the Private market, this was diesel’s worst showing since 2010, share-wise, and since 2008, volume-wise. Diesel also had its worst showing since 2005 as a share of the True Fleet market, but the difference is relatively small: it never did go above the mid-70s in the intervening years. Petrol picked up most of the slack, gaining around 2.5% in both markets. Hybrid showed consistent growth in True Fleets, going from just under one percent to 1.15%. However, hybrid volumes doubled in the Private market, where their share rose from 0.85% to 1.65%.

Diesel showed remarkable resilience on the Italian market, but even there, the trend – however small – is downward: losing less than a full percent in both the True Fleet (80.1% to 79.3%) and Private markets (58.5% to 57.6%). Petrol made up much of the difference, except in the private market, where hybrids progressed from 1.9% to 2.5%.
 

True Fleets Netherlands
  2015 2016
Petrol 28.20% 48.38%
Diesel 50.11% 38.96%
Electric 1.27% 2.07%
Hybrid 20.42% 10.58%

 

True Fleets Spain
  2015 2016
Petrol 11.83% 14.67%
Diesel 85.30% 81.86%
Electric 0.26% 0.38%
Hybrid 2.62% 3.09%


 

 

Dwindling further
The Netherlands never was keen on diesel, but even its much smaller market shares there are dwindling further: from 6% to 5% on the Private market, and from 50.1% to 39% in True Fleets. True Fleet petrols gained a whopping 20% - but that is mainly due to changes in Dutch automotive fiscal rules, which disfavoured hybrids (dropping from 20.4% to 10.6%). Hybrids did make some headway in the Private market though, rising from 3.7% to 4.6%. True Fleet electrics peeked rose from 1.3% just above the symbolic 2% barrier.

In Spain, the diesel share in True Fleets remained high, dropping from 85.3% to 81.9%. Most of the gain went to petrol, with hybrids picking up enough to rise above 3%. In the Private market, diesel dipped from 57.4% to just below the (equally symbolic) 50% marker. Almost all the difference was absorbed by petrol, rising to 47.4%. Hybrids made up almost all the rest, with 2.6%.

Historic lows
These six key markets all have different histories with diesel, but what unites them is that diesels were at an historic, decade-long low in virtually all of them – both for the Private and True Fleet markets. With regulators across Europe now as negative towards diesel as many of them once were positive, the negative trend for diesel is likely to continue for some time to come. The question is whether diesel will achieve some sort of lower equilibrium, or if it is on an inevitable path towards extinction.

“The end of diesel is definitely coming”, says Wolfgang Reinhold, president of the Car Remarketing Association CARA. So, does that mean diesel residual values are about to collapse? No: “There is no need to panic - yet. Fossil-fuel cars still have a future for at least two decades. So their RVs are not threatened. But everybody is now very aware that fossil-fuel engines – both diesel and petrol – are on the way out. That means the challenge for the remarketing industry at least is how better to integrate EVs into our strategies”.

With the support of: Dataforce

Authored by: Frank Jacobs